Yesterday, the CEO of Facebook, Mark Zuckerberg, appeared before Congress to answer questions, primarily on Libra, the company’s planned cryptocurrency. Congressman Brad Sherman took the opportunity to bash cryptocurrencies such as Bitcoin, saying that they could pose a threat to the US dollar.
Cryptocurrencies Could Be Harmful to the U.S. Dollar
During the hearing, Congressman Sherman addressed the challenges that cryptocurrencies such as Bitcoin could introduce to traditional fiat currencies like the US dollar.
According to him, cryptocurrencies present a potential threat to the U.S. dollar and its status as “the sole reserve currency in the world.” He stated that “cryptocurrency either doesn’t work, in which case investors lose a lot of money, or it does achieve its objectives perhaps and displaces the US dollar…”
He also pointed to a report by RAND which showed that criminals might increasingly adopt crypto payments, thus increasing their efficiency. He claimed that the U.S. dollar would provide protection in this regard:
“For the richest man in the world to come here and hide behind the poorest people in the world and say that’s who you’re really trying to help – you’re trying to help those for whom the dollar is not a good currency: drug dealers, terrorists, and tax evaders.”
Sherman has previously called for action against cryptocurrencies, urging Congress to consider banning all of them earlier this year.
Despite Sherman’s negative view toward Bitcoin, it might actually serve as confirmation that the largest cryptocurrency by market cap could present an alternative to the U.S. dollar.
In Cryptocurrency’s Defense
Zuckerberg offered his opinion on the matter of blockchain innovation and the risks of missing out. He said that “while we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months.” He was referring to the country’s upcoming launch of its own state-backed cryptocurrency later this year.
The claim that criminals mainly use cryptocurrencies has been made for some time. However, a recent report showed that most criminal activity is still carried out with fiat currencies. The report noted that even though new technology has had an impact, “money-laundering schemes detected by law enforcement are still largely characterized by traditional techniques, in particular, the use of cash.”
Apparently, not all U.S. officials agree with Brad Sherman. Tulsi Gabbard, representing the 2nd district of Hawaii, former Rep. Robert Goodlatte, and the current governor of Colorado, Jared Polis, have all been reportedly purchasing cryptocurrency assets.
Featured image courtesy of Flickr